CIBC Research discusses its reaction to today’s Canada jobs report for the month of October.
“The Canadian labour market came out of its summer lull in
spectacular fashion in October, with an unexpected surge in employment
and wage growth. The 108K jump in jobs was well above the 10K
consensus forecast, and was enough to offset the declines seen over the
summer to take the level of employment above May’s previous peak. All of
the jobs were in full time positions, and were led by manufacturing,
construction and accommodation & food service sectors. Despite the
surge in jobs, a rebound in labour force participation meant that the
unemployment rate held steady at 5.2%, although wage growth accelerated
to 5.5%, from 5.2% in the prior month and against expectations for a
slight deceleration,” CIBC notes.
“However, while today’s figure was much stronger than expected, the
volatility of this survey and declines seen over the summer means that
the 6-month average for employment gains is still only 9K, which is
slightly below the pace of labour force growth. Coupled with the fact
that there is one more employment report before the Bank of Canada’s
next meeting, today’s data shouldn’t change the narrative that
we are closer to the end of the current rate hiking cycle than the
beginning although it does support the call for a 50bp hike rather than
25bp in December,” CIBC adds.
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